Question 1

The Howey test is used to determine if an arrangement is an investment contract.

Accepted Answer

A) True 
 B)False

Question 2

The courts apply the Howey test in determining whether an arrangement is a(n)________ and therefore a security.

Accepted Answer

The answer of The courts apply the Howey test in...

Question 3

What is insider trading? How is it regulated in the United States?

Accepted Answer

Insider trading occurs when a company em

Question 4

The ________ is a registration exemption that permits local businesses to raise capital from local investors to be used in the local economy without the need to register with the Securities and Exchange Commission (SEC).

Accepted Answer

A) intrastate offering exemption 
B) Regulation A offering 
C) private placement exemption 
D) nonissuer exemption 
A) intrastate offering exemption 
B) Regulation A offering 
C) private placement exemption 
D) nonissuer exemption

Question 5

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the Securities and Exchange Commission (SEC)by means of a registration statement and an accompanying prospectus.

Accepted Answer

A) Section 24 of the Securities Act of 1933 
B) Section 12 of the Securities Act of 1933 
C) Section 5 of the Securities Act of 1933 
D) SEC Rule 506 
A) Section 24 of the Securities Act of 1933 
B) Section 12 of the Securities Act of 1933 
C) Section 5 of the Securities Act of 1933 
D) SEC Rule 506

Question 6

Section 10(b)of the Securities Exchange Act prohibits the use of manipulative and deceptive devices in contravention of the rules and regulations prescribed by the SEC.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of a registration statement?

Accepted Answer

A) A registration statement must be accompanied by financial statements certified by certified public accountants. 
B) Once submitted,a registration statement cannot be amended. 
C) The SEC judges the merits of the securities based on the registration statement. 
D) A registration statement need not reveal how a company plans on using the proceeds from the offering. 
A) A registration statement must be accompanied by financial statements certified by certified public accountants. 
B) Once submitted,a registration statement cannot be amended. 
C) The SEC judges the merits of the securities based on the registration statement. 
D) A registration statement need not reveal how a company plans on using the proceeds from the offering.

Question 8

Exempt securities include ________.

Accepted Answer

A) stock dividends and stock splits 
B) IPOs made by multinational corporations 
C) securities that have been held by a single investor for longer than a year 
D) securities worth $1 million or more 
A) stock dividends and stock splits 
B) IPOs made by multinational corporations 
C) securities that have been held by a single investor for longer than a year 
D) securities worth $1 million or more

Question 9

The ________ is a federal statute that primarily regulates the issuance of securities by companies and other businesses.

Accepted Answer

A) Securities Act of 1933 
B) Securities Exchange Act of 1934 
C) Sarbanes-Oxley Act of 2002 
D) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
A) Securities Act of 1933 
B) Securities Exchange Act of 1934 
C) Sarbanes-Oxley Act of 2002 
D) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

Question 10

Distinguish between the nonissuer exemption,the intrastate offering exemption,and the private placement exemption.

Accepted Answer

Nonissuer exemption refers to an exempti

Question 11

Interests or instruments that are expressly mentioned in securities acts are known as ________.

Accepted Answer

A) common securities 
B) implicit securities 
C) investment contracts 
D) statutorily defined securities 
A) common securities 
B) implicit securities 
C) investment contracts 
D) statutorily defined securities

Question 12

________ occurs when a company employee or company advisor uses material nonpublic information to make a profit by trading in the securities of the company.

Accepted Answer

The answer of ________ occurs when a company employee or...

Question 13

Crowd funding offerings are subject to the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following best defines short-swing profits?

Accepted Answer

A) profits made by an insider by selling shares of the corporation before the public disclosure of unfavorable information 
B) profits made by an insider by personally purchasing shares of the corporation before the public release of favorable information 
C) profits made by a statutory insider on trades involving equity securities of his or her corporation that occur within six months of each other 
D) profits made by a tippee by personally purchasing shares of the corporation either before or after the public release of favorable information 
A) profits made by an insider by selling shares of the corporation before the public disclosure of unfavorable information 
B) profits made by an insider by personally purchasing shares of the corporation before the public release of favorable information 
C) profits made by a statutory insider on trades involving equity securities of his or her corporation that occur within six months of each other 
D) profits made by a tippee by personally purchasing shares of the corporation either before or after the public release of favorable information

Question 15

The Securities Act of 1933 provides a(n)________ exemption that permits local businesses to obtain from local investors capital to be used in the local economy without the need to register with the Securities and Exchange Commission (SEC).

Accepted Answer

The answer of The Securities Act of 1933 provides a(n)________...

Question 16

The electronic data and record system of the Securities and Exchange Commission (SEC)is known as ________.

Accepted Answer

A) EDGAR 
B) NASDAQ 
C) MICEX 
D) SPSE 
A) EDGAR 
B) NASDAQ 
C) MICEX 
D) SPSE

Question 17

A(n)________ is submitted along with the registration statement to the Securities and Exchange Commission (SEC),and is also used as a selling tool to help prospective investors evaluate the financial risk of an investment.

Accepted Answer

A) organization document 
B) certificate of interest 
C) prospectus 
D) operation agreement 
A) organization document 
B) certificate of interest 
C) prospectus 
D) operation agreement

Question 18

The sale of securities by an issuer to the public is known as an initial public offering.

Accepted Answer

A) True 
 B)False

Question 19

A tipper cannot be held liable for the profits made by the tippee.

Accepted Answer

A) True 
 B)False

Question 20

An offering statement requires less disclosure compared to a registration statement.

Accepted Answer

A) True 
 B)False

Exam 17: Investor Protection, E-Securities, and Wall Street Reform

The Howey test is used to determine if an arrangement is an investment contract.

The courts apply the Howey test in determining whether an arrangement is a(n)________ and therefore a security.

What is insider trading? How is it regulated in the United States?

The ________ is a registration exemption that permits local businesses to raise capital from local investors to be used in the local economy without the need to register with the Securities and Exchange Commission (SEC).

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the Securities and Exchange Commission (SEC)by means of a registration statement and an accompanying prospectus.

Section 10(b)of the Securities Exchange Act prohibits the use of manipulative and deceptive devices in contravention of the rules and regulations prescribed by the SEC.

Which of the following is true of a registration statement?

Exempt securities include ________.

The ________ is a federal statute that primarily regulates the issuance of securities by companies and other businesses.

Distinguish between the nonissuer exemption,the intrastate offering exemption,and the private placement exemption.

Interests or instruments that are expressly mentioned in securities acts are known as ________.

________ occurs when a company employee or company advisor uses material nonpublic information to make a profit by trading in the securities of the company.

Crowd funding offerings are subject to the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Which of the following best defines short-swing profits?

The Securities Act of 1933 provides a(n)________ exemption that permits local businesses to obtain from local investors capital to be used in the local economy without the need to register with the Securities and Exchange Commission (SEC).

The electronic data and record system of the Securities and Exchange Commission (SEC)is known as ________.

A(n)________ is submitted along with the registration statement to the Securities and Exchange Commission (SEC),and is also used as a selling tool to help prospective investors evaluate the financial risk of an investment.

The sale of securities by an issuer to the public is known as an initial public offering.

A tipper cannot be held liable for the profits made by the tippee.

An offering statement requires less disclosure compared to a registration statement.

Legal Heritage and the Digital Age

Ethics and Social Responsibility of Business

Courts, Jurisdiction, and Administrative Agencies

Alternative, Judicial, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Torts and Strict Liability

Cyber Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Formation and Requirements of Contracts

Performance and Breach of Contracts

Digital Law and E-Commerce

UCC Sales Contracts, Leases, and Warranties

Credit, Secured Transactions, and Bankruptcy

Small Business, General Partnerships, and Limited Partnerships

Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

Corporations and Corporate Governance

Agency Law

Equal Opportunity in Employment

Employment Law and Worker Protection

Labor Law and Immigration Law

Antitrust Law and Unfair Trade Practices

Consumer Protection

Environmental Protection

Real Property and Land Use Regulation

International and World Trade Law

Accountants' Duties and Liability

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